£180k Tax penalties wiped out in dementia case after HCR acts

A couple facing £180,000 in penalties for late tax returns had those penalties dropped after Sarah Woodall, HCR’s head of tax, went to tribunal.

Tax and Tax Investigations

A couple facing £180,000 in penalties for late tax returns had those penalties dropped after Sarah Woodall, HCR’s head of tax, went to tribunal to make clear the devastating effect that dementia, depression and death had caused.

The tribunal found as a fact the long-term burden of care for two years for his mother, who suffered from dementia, placed enormous strain on Wayne Price, on his marriage to his wife Janet and on their taxi business.

HMRC had expressed sympathy with the couple’s difficulties in theory but in practice did not accept that depression or dementia was a reasonable excuse for their failure to appeal against the penalties. The tribunal did not agree with HMRC.

The case went to Tax Tribunal, and Sarah, HCR’s tax counsel, for the Prices, told Judge Charles Hellier that Mr Price had been unable to talk about business matters with any degree of calm.

His wife had kept the business afloat but because she couldn’t discuss problems with him, she was unable to tackle either the late returns or the appeals needed to challenge the penalties.

Judge Hellier said in his judgment: “It is clear that after his mother’s death, Mr Price put his head in the sand and was not able to cope with these matters and that this carried on until about August 2017…if he could not equably discuss such matters with his wife, I do not believe that he would have been able to explain the situation in writing to HMRC or even to his accountants.”

He gave the Prices permission to appeal against the penalties for the business and gave Mr Price permission to appeal against the penalties for his personal tax returns.

Sarah Woodall said: “In fact, HMRC dropped all the penalties, which was a great outcome. HMRC’s rules should be applied with humanity – when people are clearly vulnerable, HMRC can and should behave with understanding and flexibility. Dragging vulnerable people through the courts seems highly inappropriate.”

Details of the judgement are available here.

Sarah can be contacted at swoodall@hcrlaw.com or on 020 3375 8301.

Key contacts involved

Sarah Woodall, Partner (Barrister), Head of Tax

Corporate

Direct Dial: .
Mobile: 07384 118 426

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